The Republicans used to be the party of (relatively) free-traders in this country, recognizing that when it comes to manufacturing, nations ought to make what nations can make the best: most efficiently, with a quality and a price that makes consumers around the world prefer that commodity as compared with similar stuff made in another country.
Your country will make something else more efficiently, because of labor- and commodity-price differences, because of access to raw materials, because of education and technology. You will therefore prosper, and be able to sell to and buy from other countries.
There were always exceptions, of course. The GOP-leaning management and ownership of a big Pennsylvania steel company was likely to applaud White House moves to put tariffs on South Korean or Chinese steel, shoring up their own business, at the same time as they would be in theory at least against the creation of trade wars.
And, for good reason. Tariffs, and trade wars, are economically unhealthy for all concerned.
But the Republican Party turned quickly into the party of tariffs and trade wars during the presidential administration of Donald Trump. “Tariffs are the greatest!” Trump actually tweeted in July 2018. He then went on to display a lack of understanding of the effects of the import/export burdens that did not make sense for a man with an undergrad degree in business from Penn: “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that — and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!”
Uh-huh.
In the Trump years, it was mostly Democrats pointing out the reasons tariffs, which are a tax on your own consumers, don’t work. Sadly, in the almost two years since Trump has been out of office, the Democratic administration of Joe Biden has carried on some of the Trump-era tariffs. Now both parties are again the parties of protectionism. It’s a cynical effort on their part to curry favor with voters who mistakenly think a pure “buy American” policy lifts all citizens’ boats. It may temporarily, for instance, lift boats of steel workers and steel bosses. But by making steel more expensive for millions of consumers, “buy American” only hurts most Americans.
Now the World Trade Organization is again rejecting the Trump-Biden foreign steel and aluminum tariffs in a ruling made last week, and the White House is continuing to defend the economically indefensible. It continues to back the taxes on American consumers — 25% on steel, 10% on aluminum — by claiming that importing them threatens national security under Section 232 of the Trade Expansion Act.
In its ruling, the WTO said it was “not persuaded” that the U.S. implemented the tariffs “in time of war or other emergency in international relations” that would justify the tariffs on national security grounds, Fox Business News reports.
The Biden response has, to be fair, been a bit more logical than the original bludgeon tactics. The administration negotiated “agreements with the EU, Japan, and the United Kingdom that functionally eliminate the tariffs and replace them with import quotas that negate the taxes on volumes of imported steel and aluminum that fall beneath the threshold. Those trading partners dropped retaliatory tariffs against the U.S. in response to the Biden administration’s changes,” FBN reports.
But the White House continues to maintain to the WTO that continuing to keep other tariffs is a matter of “national security.” It is not. And as a Cato Institute study this year showed, U.S. tariffs continue to put domestic steel consumers at a “major cost disadvantage versus their competition in Europe and elsewhere.”
Tariff taxes only hurt our economy. They should all be eliminated.
